Today’s big question: Is inflation really under control?
It’s tough to say with crude oil prices on the rise. WTI is up more than 15% in July.
Many analysts have Brent price targets in the mid 90s before year end.
Gasoline prices have been experiencing a surge lately as well, with futures soaring to a nine-month high of $2.9 per gallon.
In Asia, prices have increased 15% in July alone, and are currently at $2.53 per US gallon.
This surge in energy prices is being driven by a number of factors.
Asia’s gasoline supply stems mostly from Chinese consumers ramping up demand amidst peak summer driving season, with commercial gasoline inventories in the country falling to the lowest since at least 2019.
A string of forced events at Exxon’s Baton Rouge refinery in the US, Shell’s Pernis refinery in the Netherlands and ENEOS’s Mizushima plant in Japan have cut gasoline supply across all three key continents.
The average price of regular gasoline in the US currently stands at $3.71 per gallon.
This rise in energy prices is a major liability for the Biden administration, as it could further fuel inflation.
The anticipation for crude oil bias remains long as we’re currently looking for a weekly settlement above a key price level which will propel us into the mid-80’s within just a few weeks time or sooner.
Bigger picture could propel WTI towards the $100 mark by year end if we stay on the current grind higher.
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